The State Capitol Shake-up

The 2012 election shake-up is reshaping St. Paul. Minnesota state lawmakers have moved on quickly from election night elation and shock.

Preliminary Senate and House directories were immediately published. The new majority and minority caucuses filled leadership posts within days.  By last weekend, Senate and House committees were reorganized and chairs appointed.

Members are now picking their new offices as voters’ will is transferred into the hands of the moving crews who are back to where they were two years ago when they last managed the transfer of power in the legislature.

Persistent Budget Deficit

The Minnesota Legislature will convene on January 8. It is widely expected the new DFL leaders and the Governor will work to resolve the persistent structural budget deficit that has dogged the state for more than a decade. They are floating ideas that combine revenue-producing tax reforms and increases, along with cost and program cuts.

The message is clear — the election did not open spending flood-gates. Lawmakers face an anticipated $3.5 billion mountain of debt, inflationary costs, and obligations to pay back funds borrowed from already appropriated state dollars for schools. While there may be some small, strategic spending increases to start building for the future, the real goal is to stabilize the state’s budget as a first step in creating the platform for investments.

But the pressures to do more than just balance the budget will be great. Beyond making good on promises to local school districts, there’s a call to restore local government aid to fund city and county services and relieve pressure on local property taxes.  Added to that is pent-up demand to address needs in higher education, health and human services, courts, public safety, housing and community development, and jobs growth.

The new legislative leaders are already working overtime to tamp down expectations.

Public/Private Partnerships, Equity

For grantmakers, the new political environment in St. Paul suggests an openness to exploring public/private partnerships as more than cost-shifting propositions — if only because the Governor and new legislators are more comfortable with government action.

Other changes may be driven, in part, by a climate of inclusiveness that many in the new majorities perceive as the message from the votes on the two constitutional amendments. Interest may increase in initiatives to promote equity and reduce disparities.

But, again, the state’s persistent financial challenges will serve as the great moderator of expectations. The new crew in the Minnesota legislature and the Governor all seem to have resolving the structural deficit as their top objective — far and above all others.

-Bob Tracy, MCF director of government relations and public policy

Photo cc Moving Simplified

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